Home > Money > Question
Need Expert Advice?Our Gurus Can Help

Ulhas Joshi  |266 Answers  |Ask -

Mutual Fund Expert - Answered on Dec 28, 2023

With over 16 years of experience in the mutual fund industry, Ulhas Joshi has helped numerous clients choose the right funds and create wealth.
Prior to joining RankMF as CEO, he was vice president (sales) at IDBI Asset Management Ltd.
Joshi holds an MBA in marketing from Barkatullah University, Bhopal.... more
Asked by Anonymous - Dec 27, 2023Hindi

Is it advisable to invest lumpsum amount in 1 fund or different funds

Ans: Hello & thanks for writing to me. Please provide details like your age, investment horizon & risk tolerance for me to suggest fund or funds that you can consider investing in.
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

You may like to see similar questions and answers below


Ramalingam Kalirajan  |5194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Apr 23, 2024


Ramalingam Kalirajan  |5194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 20, 2024

Good evening Ramalingam Sir I am 47 years old, I have started my journey in mutual funds for the last 3 years and wanted to do continue for the next 8 years. I have 1.5 CR in different instruments like MF, NPS and PPF. Sir I am inviting 38000/month in 7 different funds. Sir I have approx 80 lacs in bank FD and wanted to put in mutual funds. Can I do lump sum in existing funds or there can be different from these funds 1 Axis small cap 2 ICICI Prudential pure equity retirement 3 HDFC retirement pure equity fund 4 SBI Contra fund 5 Quant Mid Cap fund 6 Mahindra Manulife Small cap 7 Nippon India large cap Sir please suggest me about lump sum, wheather I have to choose different funds or do in existing 7 funds
Ans: It's impressive that you've accumulated ?1.5 crore in various instruments like mutual funds, NPS, and PPF. Additionally, saving ?80 lakhs in bank FDs shows financial prudence. Your current SIP of ?38,000 per month in seven different mutual funds is a commendable strategy. Now, you’re considering investing the ?80 lakhs from FDs into mutual funds.

Evaluating Your Investment Strategy
Existing Mutual Fund Investments
Your seven mutual funds cover a diverse range of market segments. This diversification helps in spreading risk and potentially enhancing returns. These funds include small-cap, pure equity, contra, mid-cap, and large-cap categories, giving you broad exposure.

Advantages of Lump Sum Investments
Potential for Higher Returns: Investing a lump sum can lead to higher returns, especially in a rising market. Timing the market is crucial here.

Cost Efficiency: Lump sum investments incur fewer transaction costs compared to spreading investments over time.

Risks of Lump Sum Investments
Market Volatility: Lump sum investments are susceptible to market timing risk. If the market dips after your investment, you could see short-term losses.

Stress and Anxiety: A significant market downturn can cause stress and anxiety, especially with a large investment.

Considering Systematic Transfer Plan (STP)
Instead of investing the entire ?80 lakhs as a lump sum, consider a Systematic Transfer Plan (STP). Here’s why:

Reduced Market Timing Risk: STP spreads your investment over a period, reducing the impact of market volatility.

Regular Investment: STP allows regular investments from your FD to mutual funds, leveraging rupee cost averaging.

Allocating Your Investment
Reviewing Existing Funds
Assess Performance: Review the performance of your current funds. Ensure they meet your investment goals and risk tolerance.

Diversification: Ensure your existing portfolio remains diversified. Avoid over-concentration in any single market segment.

Adding New Funds
Balanced Funds: Consider adding balanced funds to your portfolio. These funds mix equity and debt, offering growth and stability.

International Funds: Adding international mutual funds can provide global exposure, reducing country-specific risk.

Professional Guidance
Engaging with a Certified Financial Planner (CFP) can optimize your investment strategy. A CFP can:

Tailored Advice: Provide advice based on your specific financial situation and goals.

Portfolio Management: Help manage and rebalance your portfolio, ensuring it aligns with market conditions and your risk tolerance.

Implementing Your Plan
Step-by-Step Approach
Emergency Fund: Ensure part of your ?80 lakhs remains in a liquid fund for emergencies.

STP from FD to Mutual Funds: Set up an STP to transfer funds from your FD to your mutual funds systematically.

Review and Adjust: Regularly review your portfolio with your CFP. Adjust investments based on performance and changing market conditions.

Transitioning your ?80 lakhs from FDs to mutual funds is a wise decision. Using STP to invest systematically can mitigate risks and leverage market opportunities. Diversifying further with balanced and international funds can enhance your portfolio.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |5194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 25, 2024

Is lumpsum investment is good investment too in mutual fund
Ans: Understanding Lumpsum Investment in Mutual Funds

Investing in mutual funds is a popular strategy for growing wealth. Among the various investment methods, lumpsum investment stands out. Let's explore whether it's a good strategy.

What is Lumpsum Investment?
Lumpsum investment involves putting a large amount of money into a mutual fund at one go. This approach contrasts with Systematic Investment Plans (SIPs), where you invest smaller amounts regularly.

Benefits of Lumpsum Investment
Potential for Higher Returns:

Investing a large sum can yield higher returns if the market performs well after your investment. You can gain significantly in a rising market.


Lumpsum investments are convenient. You invest once and don't need to keep track of regular payments.

Ideal for Windfalls:

If you receive a bonus, inheritance, or other windfall, a lumpsum investment can be a good way to put that money to work.

Risks of Lumpsum Investment
Market Timing Risk:

Lumpsum investing carries the risk of market timing. If you invest just before a market downturn, your investment can lose value.

Market Volatility:

The stock market is volatile. A large investment can be impacted by sudden market fluctuations.

Emotional Stress:

Investing a large amount at once can be stressful, especially if the market is unstable. Watching your investment's value drop can be disheartening.

Lumpsum vs. SIP: A Comparison
Market Conditions:

SIPs work well in volatile markets. They allow you to average the purchase cost of units. Lumpsum investments can be more beneficial in a bullish market.

Investment Discipline:

SIPs enforce a disciplined investment approach. Lumpsum investments require more market knowledge and timing.

Risk Management:

SIPs spread risk over time. Lumpsum investments concentrate risk at one point in time.

Strategic Lumpsum Investment
Market Analysis:

Understand the market conditions before investing. Investing in a bullish market can maximize gains.


Diversify your lumpsum investment across various mutual funds. It helps spread risk and increases potential returns.

Professional Guidance:

Seek advice from a Certified Financial Planner. They can provide insights and strategies tailored to your financial goals.

Systematic Transfer Plan (STP): An Alternative
What is STP?

A Systematic Transfer Plan (STP) allows you to transfer a fixed amount from one mutual fund to another at regular intervals. It combines the benefits of lumpsum and SIP investments.

Benefits of STP:

Risk Mitigation:

STP mitigates the risk of market timing. It spreads the investment over time, reducing the impact of market volatility.

Regular Investment:

Like SIPs, STP ensures regular investment. It helps in averaging the purchase cost of units over time.

Ideal for Lumpsum Amounts:

STP is ideal for investing a large amount without the risk of timing the market incorrectly. It provides a balanced approach.

When is Lumpsum Investment Suitable?
In a Down Market:

Lumpsum investment can be beneficial in a down market. Buying at lower prices can yield significant gains when the market recovers.

Switching Between Equity Funds:

When moving money from one equity fund to another, lumpsum investment is appropriate. It allows you to maintain your market exposure.

Small Additional Investments:

Lumpsum is suitable for small additional purchases of 2-3% of your overall equity portfolio. It enhances your existing investment without substantial risk.

Advantages of Actively Managed Funds
Professional Management:

Actively managed funds are overseen by professional fund managers. They aim to outperform the market by making strategic investment decisions.

Research and Expertise:

Fund managers conduct extensive research. They have the expertise to identify high-potential investment opportunities.


Actively managed funds can adapt to market changes. Fund managers can reallocate assets to mitigate risks and enhance returns.

Disadvantages of Index Funds
Limited Flexibility:

Index funds track a specific index. They don't adapt to market changes, which can limit their performance in volatile markets.

No Active Management:

Index funds lack active management. They don't benefit from the expertise of professional fund managers.

Market Performance Dependency:

Index funds depend on the performance of the underlying index. If the index performs poorly, so does the fund.

Benefits of Regular Funds Over Direct Funds
Advisor Support:

Regular funds offer support from Certified Financial Planners. They provide valuable advice and insights for informed investment decisions.

Better Accessibility:

Regular funds are more accessible. Investors can easily reach out to advisors for assistance and information.

Holistic Financial Planning:

Investing through regular funds ensures a holistic financial planning approach. Advisors help align investments with overall financial goals.

Investing a large amount can be daunting. It's natural to feel anxious about market performance and potential risks. Remember, every investment carries some risk, but with the right strategies and guidance, you can make informed decisions.

You're taking a significant step towards securing your financial future by considering mutual fund investments. It shows your commitment to growing your wealth and achieving your financial goals.

We understand that lumpsum investment decisions can be overwhelming. It's crucial to weigh the pros and cons, consider market conditions, and seek professional guidance.

Final Insights
Lumpsum investment in mutual funds can be a good strategy for wealth growth. It offers the potential for high returns, especially in bullish markets. However, it also carries risks like market timing and volatility. Diversification and professional guidance can help mitigate these risks. Remember, investing is a journey, and making informed decisions is key to achieving your financial goals.

When to Use Lumpsum Investment:

During Market Corrections:
When the market is down, investing a lumpsum can be wise. You can buy more units at lower prices and benefit from the eventual recovery.

Switching Equity Funds:
When transferring money from one equity fund to another, a lumpsum investment maintains your market exposure without gaps.

Small Additional Investments:
Adding a small amount (2-3% of your portfolio) as a lumpsum can be a good strategy. It allows you to enhance your investment without significant risk.

Using STP for Better Investment:

A Systematic Transfer Plan (STP) can be a balanced approach when you receive a large sum. It allows you to transfer funds gradually from a debt fund to an equity fund. This method reduces market timing risk and provides the benefits of regular investment.

Mitigating Risk:
STP spreads your investment over time, reducing the impact of market volatility.

Cost Averaging:
Like SIPs, STP averages the purchase cost of units, helping you navigate market fluctuations.

STP offers the flexibility to adjust the transfer amount and frequency according to market conditions.

Lumpsum investment in mutual funds can be advantageous if done with careful planning and market understanding. It can yield high returns in favorable market conditions but also carries risks. Diversification, professional guidance, and using strategies like STP can help mitigate these risks and enhance potential returns.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more


Ramalingam Kalirajan  |5194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 11, 2024

Asked by Anonymous - Jul 11, 2024Hindi
I have been advised to invest lump sum in different ICICI Pru MF - Large & Mid Cap Fund; Business Cycle Fund and Multi Asset Fund. Kindly suggest is it good to proceed or with some other alternative?
Ans: Investing in mutual funds is a smart way to build wealth over time. Let's discuss your investment options and evaluate whether the recommended funds align with your financial goals.

Understanding Mutual Funds
Mutual funds pool money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other securities. They offer professional management, diversification, and liquidity. When you invest in mutual funds, you benefit from the expertise of fund managers who make investment decisions on your behalf.

Large & Mid Cap Funds
Large and mid cap funds invest in a mix of large and mid-sized companies. Large cap companies are typically well-established and stable, while mid cap companies offer growth potential. Investing in these funds provides a balanced approach, combining the stability of large caps with the growth potential of mid caps.

Diversification: Large and mid cap funds offer exposure to both stable and growing companies.
Risk Management: Large cap companies add stability, while mid caps provide growth opportunities.
Professional Management: Experienced fund managers make informed decisions to maximize returns.
Market Volatility: Mid cap stocks can be more volatile than large caps.
Investment Horizon: Ideal for long-term investors who can ride out market fluctuations.
Business Cycle Funds
Business cycle funds invest based on the economic cycle. They adjust their portfolios according to the different phases of the economy – expansion, peak, contraction, and trough. These funds aim to capitalize on opportunities at each stage of the cycle.

Economic Insight: Fund managers use economic indicators to adjust investments.
Dynamic Allocation: Portfolios are adjusted to maximize returns in each economic phase.
Growth Potential: Potential for higher returns by investing in sectors poised to perform well in each cycle.
Complexity: Requires understanding of economic cycles and indicators.
Timing Risk: Success depends on accurate timing of economic phases.
Volatility: Can be more volatile due to sector rotation and timing.
Multi Asset Funds
Multi asset funds invest in a mix of asset classes such as equities, bonds, and gold. This diversification helps to balance risk and return, making these funds suitable for conservative investors seeking steady growth.

Diversification: Exposure to multiple asset classes reduces risk.
Stability: Bonds and gold provide stability during market downturns.
Balanced Returns: Potential for steady, balanced returns over time.
Moderate Growth: Returns may be moderate compared to equity-focused funds.
Expense Ratios: Multi asset funds can have higher expense ratios due to active management.
Market Conditions: Performance depends on the behavior of different asset classes.
Evaluating Your Investment Options
Investing in the suggested funds offers a diversified approach to grow your wealth. However, it's important to assess how they align with your financial goals, risk tolerance, and investment horizon.

Diversification and Balance
Large & Mid Cap Funds: Provide a good balance between stability and growth.
Business Cycle Funds: Add a dynamic element by adjusting to economic phases.
Multi Asset Funds: Ensure stability through diversification across asset classes.
Risk Management
Large & Mid Cap Funds: Manage risk through a mix of stable and growth-oriented stocks.
Business Cycle Funds: Require careful monitoring to manage timing risks.
Multi Asset Funds: Offer lower risk through asset class diversification.
Long-Term Growth
Large & Mid Cap Funds: Suitable for long-term growth with some volatility.
Business Cycle Funds: Potential for high returns but require patience and understanding.
Multi Asset Funds: Steady growth with lower volatility, ideal for conservative investors.
Power of Compounding
Mutual funds harness the power of compounding, where earnings generate more earnings over time. Reinvesting dividends and capital gains can significantly boost your wealth. Starting early and staying invested for the long term maximizes the benefits of compounding.

You are wise to consider mutual funds for building wealth. They offer a balanced approach to investing, aligning with various financial goals. Your commitment to making informed investment decisions is commendable. Understanding the nuances of each fund type shows your dedication to growing your wealth responsibly.

Seeking Professional Guidance
It's important to consult with a Certified Financial Planner (CFP) who can provide personalized advice based on your financial situation. A CFP can help you create a tailored investment strategy, ensuring your portfolio aligns with your goals and risk tolerance.

Evaluating the Disadvantages of Index Funds
Index funds aim to replicate the performance of a market index. While they offer low costs and diversification, they have limitations. Index funds lack flexibility, sticking to a predefined list of stocks regardless of market conditions. They can't outperform the market since they only aim to match it.

Benefits of Actively Managed Funds
Actively managed funds, like the ones you're considering, offer potential for higher returns. Experienced fund managers make strategic decisions to outperform the market. They can adjust portfolios based on market trends and economic indicators, providing a dynamic investment approach.

Disadvantages of Direct Funds
Direct funds bypass intermediaries, offering lower expense ratios. However, they require a higher level of investment knowledge and time commitment. Regular funds, managed by a CFP, provide professional guidance, helping you navigate market complexities and make informed decisions.

Final Insights
Investing in large and mid cap, business cycle, and multi asset funds offers a balanced approach to wealth building. These funds provide diversification, risk management, and long-term growth potential. While each fund type has its advantages and considerations, they collectively align well with a comprehensive investment strategy.

Your proactive approach to understanding these funds is impressive. Consulting with a Certified Financial Planner ensures you receive tailored advice, maximizing your investment potential. Remember, the key to successful investing is staying informed, diversifying your portfolio, and maintaining a long-term perspective.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


..Read more

Latest Questions

Ramalingam Kalirajan  |5194 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jul 24, 2024

Hi Sir, I have invested in a policy of HDFC bank with name HDFC Life Uday. In this I have been investing 24K per annum. Same amount i have to invest for 8 years that will end up in 2026. Maturity time is 2030. Can you please tell me how much amount will i get on maturity.
Ans: You have invested in the HDFC Life Uday policy, a traditional, non-linked insurance plan. You are paying Rs. 24,000 annually for 8 years, with the policy maturing in 2030.

Understanding HDFC Life Uday
HDFC Life Uday offers a combination of savings and protection. It includes a guaranteed sum assured and potential bonuses. However, this type of policy has several disadvantages.

Disadvantages of HDFC Life Uday
Lower Returns: Traditional policies typically offer lower returns compared to other investment options. The returns may not keep up with inflation.

High Costs: These policies often have higher costs due to premiums covering both insurance and savings components.

Limited Liquidity: Traditional policies have long lock-in periods. Accessing your money before maturity can be difficult and costly.

Inflation Impact: The fixed returns may not keep pace with inflation, reducing the purchasing power of your maturity amount.

Complexity: The structure of bonuses and guarantees can be complex and less transparent.

Surrendering the Policy
Given the disadvantages, it may be beneficial to surrender your HDFC Life Uday policy and reinvest in more efficient options.

Surrender Value: Before making a decision, check the surrender value of your policy. This is the amount you will receive if you terminate the policy early.

Reinvestment Strategy: Consider reinvesting the surrender value in mutual funds. Mutual funds can provide higher returns and greater flexibility.

Benefits of Mutual Funds
Higher Returns: Mutual funds generally offer higher returns compared to traditional policies.

Diversification: Mutual funds invest in a variety of assets, reducing risk.

Liquidity: Mutual funds are more liquid, allowing you easier access to your money.

Professional Management: Funds are managed by experts who adjust investments based on market conditions.

Flexibility: You can choose from a wide range of funds based on your risk appetite and financial goals.

Investing Through a Certified Financial Planner (CFP)
Consider investing in mutual funds through a Certified Financial Planner (CFP). Here’s why:

Expert Guidance: A CFP provides personalized advice tailored to your financial goals.

Regular Monitoring: They continuously monitor and adjust your investments to optimize returns.

Comprehensive Planning: CFPs offer a holistic approach, covering all aspects of your financial life.

Final Insights
Given the lower returns, high costs, and limited liquidity of traditional policies like HDFC Life Uday, it may be wise to surrender the policy. Reinvesting in mutual funds through a Certified Financial Planner can provide higher returns, greater flexibility, and professional management. Review your surrender value and consult a CFP for personalized advice and a comprehensive financial plan.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,


...Read more

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.


You haven't logged in yet. To ask a question, Please Log in below

A verification OTP will be sent to this
Mobile Number / Email

Enter OTP
A 6 digit code has been sent to

Resend OTP in120seconds

Dear User, You have not registered yet. Please register by filling the fields below to get expert answers from our Gurus
Sign up

By signing up, you agree to our
Terms & Conditions and Privacy Policy

Already have an account?

Enter OTP
A 6 digit code has been sent to Mobile

Resend OTP in120seconds